Phoonk 1 ends with the killing of Madhu, the woman who casts a black magic spell on Rajivs daughter Raksha. Phoonk 2 begins with Madhus ghost returning from the grave to seek revenge on the family. On bagging a new construction project, Rajiv moves with his family to a new place. Raksha and Rohan begin exploring the new place and the surroundings the lonely beach and then the woods behind the house.